 WHERE
RUSSIA MEETS ASIA |
Primorsky Krai, literally the 'maritime region',
stretches along Russia's Pacific coast, and straddles
the borders of China and North Korea. Asian tourists
flock to its warm seas during the Indian summer
months, while the Krai's forest-covered hills and
valleys are home to the spectacular Amur Tigers
and Leopards. The region's largest city is the port
of Vladivostok, with a buzzing nightlife and streets
that brim with imported Japanese cars. In September
2002 the city hosted the Asia Pacific Investment
Forum (APEC) attracting delegates from 12 member
countries. The event hoped to raise the profile
of the Russian Far Eastern region in Asia-Pacific,
one of the reasons that Russia originally joined
the forum in 1997.
| THE FUTURE
FOR ECONOMIC GROWTH |
Regional Governor Sergei
M. Darkin is backing new investment projects
with $150 million from the regional budget last
year, and is keen to further develop transport and
energy sectors. As the hub of sea and rail routes,
Vladivostok is "the ideal place to act as a
bridge between Russia and Pacific Rim countries,"
says city Mayor Yuri Kopylov.
Yet while APEC depicted Primorsky Krai as being
open to Asian investors, the event could be regarded
as merely window dressing for a region that struggles
with mafia crime and energy shortages.
|
Currently investment
in the region is mostly Russian, with national corporations
buying key assets such as the region's four main
ports. In recent deals, metal giants Severstal bought
19.9% stakes in Russia's largest deepwater Pacific
Port of Vostochny, based
in Nakhodka and the Yevrazholding Company bought
stakes in Nakhodka Commercial Port, while Magnitogorsk
Metallurgical Plant bought a large stake in Vladivostok
Commercial Port (26%), other controlling share holders
are Ermodus Enterprises Ltd (17.42%), and Credit
Suisse of Luxemburg with 6.02%. The remaining share
holders are Russian and include the State Property
Ministry with 19.98% and Universalny Eksplutatsionny
Komplex Company (8.03%). The Moscow-based MDM Group
(Moskovsky Delovoi Mir Group) also bought out the
Port of Posiet
The energy sector also attracted outside interest:
the infamous MDM group through its Siberian Coal
Energy Company, which is one of the three largest
coal corporations of Russia bought 19.1 percent
of shares in coal mining company Primorskugol
in 2002, and Moscow's Alliance Group has controlling
shares in Nefteport, Nakhodka's oil port. The Primorye
Oil and Gas Complex is also a good example of
successful cooperation with an international investment
partner and was a project that was successfully
launched through the APEC forum.
However, there are examples of successful joint
ventures, with investment from the Republic of Korea
going to Vladivostok Business Center Ltd, owner
of a downtown Hotel Hyundai, and the successful
mobile communications company HTK,
which is now rated as the number one mobile operator
in the region. The USA launched the soft drinks
production plant Coca Cola Vladivostok Bottlers
in 1995, with smaller mineral water producers such
as Lastochka Voda cooperating
with Italian and Japanese firms in order to implement
stable production facilities in the region. Other
Japanese ventures include STS Technowood, a producer
of plywood beams, and the Toyota dealership, "Summit
Motors."
Governor
Darkin, elected last June, formerly the director
of a local fishing company, is more open to Asian
investment than the previous administration, regularly
meeting delegations of Korean, Japanese and Chinese
investors he believes the future economic success
of the region is closely related with Asia Pacific
relations, "Attracting investment is our major
target. Primorye Administration activities are aimed
at economic increase, which is impossible without
economic integrations into Asia Pacific economies."
Says Governor Darkin. |
